Posted 1 year ago on July 18, 2013, 7:06 p.m. EST by JackHall
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Formerly - Will the United States still be here in a thousand years? Part IV

Where will the middleclass be in fifty years?

Imagine the government’s failure to restore the middleclass to the prosperity it enjoyed in the 20th century. Outsourcing the core manufacturing and technology industries overseas by both the US Government and US investors to take advantage of human resource costs eviscerated the economy and the ability to create wealth here and raise and restore the American workers’ living standard. Government and investors have undervalued American labor. Profits for the few have been given a higher priority than a better living standard for all Americans.

The standard of living is defined as the level of wealth, comfort, material goods and necessities available to a certain socioeconomic class in a certain geographic area. The standard of living includes factors such as income, quality and availability of employment, quality and affordability of housing, hours of work required to purchase necessities, gross domestic product, inflation rate, number of vacation days per year, affordable (or free) access to quality healthcare, quality and availability of education, life expectancy, incidence of disease, cost of goods and services, infrastructure, national economic growth, economic and political stability, political and religious freedom, environmental quality, climate and safety.
The government has always backed some mortgages to make it easier for people like veterans and low-income, first-time home buyers to get into the housing market. But during the crisis, the government's role exploded.

Fannie Mae and Freddie Mac, private companies that guarantee mortgages, collapsed and were taken over by the government. Then, as private lenders pulled out and the market collapsed, the government increased the size of the loans guaranteed by Fannie and Freddie and other government programs. As a result, the government now guarantees almost the entire mortgage market.

In March 2013, the agency that oversees Fannie and Freddie said certain operations of the two firms would be consolidated. The government currently guarantees some mortgages over $700,000, which, at 14 times the median household income, is far more than most middle class families can afford.

Peer into the misty horizon and view gated communities of the one-percent of the future, with armed private security personnel. Modern day feudalism is being forced upon the American people, and for the most part, we have been fooled into thinking that it is good for us, when in fact, it is destroying the free markets.

From Bloomberg’s edicts on sugary drinks and elevators, to the recent spate of food manufacturers applying for permits to sell horse meat for human consumption, the American standard of living is under assault on a daily basis. We are being encouraged to eat less, want less, and lower our expectations on everything from food to cars.

These ideas are representative of the turn of the tides of power away from the freedom of capitalism, and a return to the tyranny of the elite over the individual. They are using the bogus argument that it is more ‘green’ and better for our health to turn control of resources over to government. In short, it is a restoration of the forces of feudalism.

In the ‘bad old days’ of the Middle Ages government was, in most parts, run by a concept described by historians as “feudalism“. Although some historians simply describe feudalism as despotic rule, and/or tyranny, feudalism is a term used when the elite or nobility has control over lower classes and their resources, through voluntary or deeded title and landholdings.

What is the most enduring and stable system of economic and social order the world has known? Not capitalism, or socialism, or dictatorship. It is feudalism.

By any other name, it is the system whereby political and economic power is held by a relatively small group of capital owners who permit that capital to be worked or used by the large majority of landless for their subsistence. The landless have little or no political power of their own, but in a stable system are guaranteed a basic set of rights. Supreme authority may be further concentrated in a small group of officials or a single individual elected by the capital owners, but this authority is often loosely wielded.

Europe, through most of its history since the Dark Ages was a series of feudal states, which remained remarkably stable for hundreds of years, until power was slowly devolved to larger and larger groups of peoples. The very stable Asian societies in Japan and especially China have long been feudal in nature, and as I will argue, China remains the largest and potentially most powerful feudal kingdom in the world’s history.

The Roman Empire was essentially a feudal empire, albeit with a strong centralized government, as was the Greek civilization before it. Although the cradle of democracy, the Greeks limited democratic rights mainly to the landowners, who were served by slaves and freemen who were not participants in shaping the governmental or economic system.

In 2011 a total of 252.78 million migrant workers (an increase of 4.4% compared to 2010) existed in China. Out of these, migrant workers who left their hometown and worked in other provinces accounted for 158.63 million (an increase of 3.4% compared to 2010) and migrant workers who worked within their home provinces reached 94.15 million (an increase of 5.9% compared to 2010). Estimations are that Chinese cities will face an influx of another 243 million migrants by 2025, taking the urban population up to nearly 1 billion people. In the medium and large cities, about half the population will be migrants, which is almost three times the current level.

Urbanization in the People's Republic of China increased in speed following the initiation of the reform and opening policy. By the end of 2012, the mainland of the People's Republic of China had a total urban population of 712 million or 52.6% of the total population, rising from 26% in 1990.

In the long term, China faces increasing urbanization; according to predictions, nearly 70% of the population will live in urban areas by 2035. Over the next two decades China will build 20,000 to 50,000 new skyscrapers and more than 170 cities will require mass transit systems by 2025.

We can listen all day to what the government would be saying it would like to do about creating jobs for the American people “after” the corporations have already moved manufacturing and technology industries out of the country. These are the terms that will be offered to what is left of the American middleclass.

Wouldn’t it be more beneficial for Americans if the products China needs for urbanization were made in the USA and then exported to China? The insanity of deregulated outsourcing has stripped the United States of its ability to pay its debts. This wasn’t the kind of free market anyone would want. If the United States was exporting products to China instead of technology and factories the trade balance would tip toward the United States for first time in decades and provide a path to paying off our debts. Where is the political correctness of outsourcing American technology and jobs to the world’s largest feudal enclave of state-owned corporations at the expense of American labor and tax payers for the profits to private enterprise? Americans don’t necessarily want cheaper products, they want value. They don’t want products that are harmful or break easily and need to be replaced with or without a warranty. They want products that are built to last. Americans had a living standard due to the efforts of American labor on behalf of their countrymen. Americans want their jobs back. Americans need another “New Deal”.

The collapse of the American economy was brought on by the bursting housing bubble and by globalization, outsourcing to China, India, and elsewhere by US Government and private enterprise while globalization has placed control of the economy beyond the reach of sovereign governments. Globalization has enriched the elite. It is ironic that the colony that broke away from feudalism and declared its independence in 1776 was recaptured by voluntarily welcoming globalization. The Declaration of Independence has been redacted.

Imagine the United States one thousand years from now as a network of feudalism: walled cities that devolved from the 50 States. Those unable to live within the walls of these fortresses may have to exist in the wilderness or in a No Man’s Land controlled by organized crime.

2 Comments

We never outsourced core stuff, only the older tech stuff that nobody wants to do anymore.

"industries overseas by both the US Government and US investors to take advantage of human resource costs eviscerated the economy and the ability to create wealth here and raise and restore the American workers’ living standard."

Also not true. The current account must balance by definition. What that means is as we run a trade deficit, the money comes back as debt. That's why we're printing a ton of money and giving the Chinese paper for the real stuff they gave us (for free). The only small problems with this model is it means we need a few hundred thousand more on social security instead of making that 2.5-3% of GDP that we import. Most stuff, like 97+% of the stuff we consume we produce here. It also can't go on forever since that 2.5% slowly compounds to the point where we can't export debt any longer and low level jobs start coming back home. We are seeing exactly this right now.

Americans want this work. Why outsource anything when there is high unemployment in the United States? The Verrazano Bridge project is another project that should have been kept for American workers here in New York City.